WASHINGTON, February 12,2014 — The U.S. State Department released an executive summary last week concerning the proposed Keystone XL pipeline that would run from the Canadian border to Houston.
According to the executive summary, “if permitted, Keystone has agreed to incorporate additional mitigation measures in the design, construction, and operation of the proposed Keystone XL project, in some instances above what is normally required.” These measures are an effort to mollify environmentalists concerned about the impact of the pipeline.
Opposition to Keystone rests partly on the hope that new energy technologies will come along and render the need for oil obsolete. Why waste billions on an oil pipeline when we could invest that money in researching and developing new technology?
Oil will eventually be displaced in our energy economy, but not today. In science, technology and economics, change is the only constant. We need to be aware of transition phases. This is something that people like Karl Marx completely misunderstood. In Marx’s day, there were rapid changes in the scientific knowledge and production methods. There was an incredible accumulation of wealth as theoretical knowledge was rapidly transformed into useful products. Old ways were thrown aside.
To men like Marx, it was the end of the world, or at least the end of capitalism. It was just a transition phase, however, the prelude to a vibrant new phase of capitalism; we call that transition phase the Industrial Revolution.
Today the world is in another transition phase, again caused by advances in knowledge and technology. Just as in Marx’s day, those who do not understand it see it as the end of social progress and the end of capitalism. There is talk of a technological singularity, or an economy that needs no humans as robots will produce everything. We are changing from an analogue world to a digital world.
As the capacity of memory chips grows, their abilities to transform technology also grow. Cameras, voice recorders, telephones and calculators have merged into single, wireless units called cell phones. Add in internet access and the ability to use programs called “apps,” and we have “smart” phones. No one element of smart phone function would be remarkable to someone in the 1980s — they had cell phone technology, copiers, cameras, calculators and email — but put together in one pocket-sized package, they’ve transformed the way we do things and contributed to an explosion of information.
In the era of Karl Marx, new technologies likewise transformed the world. Economic, technological and social transition phases are all different, but they share a single characteristic in common: rapid, disruptive changes in the way we do things.
Today’s transition phase has not been accompanied by a similar rapid change in energy. We still depend on oil and coal. It is with this in mind that the importance of Keystone is presented to the public, safe oil for America from not just a friendly country, but a country that shares our linguistic and cultural roots, our concepts of law, and our belief in democracy. Canada is as friendly to the U.S. as ever a country could be, and more importantly, our interests generally coincide.
How long will our interests coincide on energy policy, and how long will crude oil dominate the energy scene?
Solar power, wind, hydrogen, natural gas, nuclear, and other energy technologies are in varying levels of development and use, but oil and coal still dominate the energy scene. When we enter a transition phase in energy production and consumption, the change will be rapid. The change won’t come because we run out of oil — the stone age didn’t end because we ran out of rocks — but because the costs of using it are so high. Oil will lose its significance sooner than most think, but the money behind Keystone XL is betting that it won’t happen before the project recovers its costs.
If Keystone meets and surpasses regulatory demands and if no property is forcibly taken from citizens to build the structure, then it should be built, and the sooner the better. It would make no sense to delay Keystone in the hope that new energy technologies will render it obsolete; we aren’t soothsayers, and investors should be left to do their own divination when they decide where to put their money.
We should hope that President Obama will be objective and approve Keystone. Let the investors take their risk and make vast fortunes or lose them. Messing with energy markets won’t hasten oil’s demise. You can’t impose a transition phase. Marx was right on one thing; these huge societal upheavals form from within, when knowledge and society reach a critical point. Let it happen in its own time, and in the mean time, build the Keystone XL pipeline.